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Visa Study Estimates Indonesia Tops Travel Spending Growth by 2025


Jakarta, August 30, 2016 – Traveling has become a lifestyle for Indonesians. Visa’s report, “Mapping the Future of Global Travel and Tourism in Asia Pacific”, which forecasted travel and tourism trends in the next 10 years (2015 to 2025), found Indonesia tops the Asia Pacific region with the highest travel spending growth of 211 percent from US$5.1 billion in 2015 to US$16 billion in 2025.

The report further identified key drivers expected to impact global travel and reveals Indonesia’s average annual spending by households during a trip is likely to rise 47 percent to US$8,214. Key drivers include a growing middle class, greater Internet connectivity, improved transportation infrastructure across many countries and an aging global population.
Ellyana Fuad, President Director PT Visa Worldwide Indonesia said: “Traveling internationally will become more common and attainable in the future thanks to the changing demographics, combined with technology advances that make traveling abroad easier and less expensive. Moreover, the added convenience, security and wide acceptance of payment cards are valued by Indonesian Visa consumer credit cardholders who traveled on an average to 4.8 countries in 2015.”
Interestingly, Visa report found a growing aging global population with more time for leisure travel. Older travelers can afford bigger trips and are more focused on comfort and health than saving money. Indonesia is ranked 6th in the Asia Pacific region with a growth of 249 percent for travelers above the age of 65 years old, while the top 5 countries are Hong Kong (368%), Philippines (360%), Singapore (305%), China (280%) and Malaysia (266%).
Technology advances connects information all around the world, making traveling more convenient. On average, there are 129 mobile phones owned per 100 Indonesians in 2015 and it is estimated to grow to 149 mobile users by 2025. Although there is still only a small number of Indonesians using the internet, the number of internet users continue to ascend from 18 to 28 people per 100 Indonesians by 2025. Digital connectivity is not only fostering greater spontaneity in travel, but also a broader array of personalized travel and tourism options as well.

Highlights of the global report include:
The Rise of a new Global Traveling Class: Growing income levels around the world is creating a new “traveling class”. The study uncovered that worldwide, households that make at least US$20,000 per year account for more than 90 percent of spending on international travel today. By 2025, it is estimated that nearly half of all global households (945 million) will be within this income range, spurring greater international travel and spending, particularly by households from emerging markets.
Rank Market 2015
1 India 6.8
2 New Zealand 6.7
3 Australia 5.9
4 Philippines 5.0
5 Hong Kong 5.0
Top five Asia Pacific markets with highest average number of countries visited by a Visa credit cardholder in 2015

Global Aging: By 2025, travelers aged 65 and above will more than double their international travel to an estimated 180 million trips, accounting for one-in-eight international trips globally. The study estimates that older travelers will be able to afford longer trips that provide greater comfort at higher prices. Trends such as “medical tourism” whereby aging populations undertake international travel for medical purposes will also take hold in the future.
Rank Market 2015 2025 % increase
1 China 1,862 7,077 280%
2 Singapore 852 3,451 305%
3 Japan 1,318 2,930 122%
4 Australia 1,073 1,931 80%
5 Taiwan 460 1,599 247%
Top five Asia Pacific markets with the highest number of international trips by 65+ year olds (thousands).

Increasing Connectivity: The combined forces of globalization and technology are expanding access. Construction of more than 340 new airports is expected over the next decade, creating new routes and destinations that will make international travel easier and more convenient. At the same time, awareness of travel options is spreading with the rapid uptake in internet access and the number of mobile devices around the world. Digital connectivity is not only fostering greater spontaneity in travel, but also spurring a broader array of personalized travel and tourism options as well.

An executive summary along with country and region-specific data as well as interactive tools can be found on www.visa.com/travelinsights.

Methodology
Visa estimates the number of households traveling internationally by comparing Visa-branded cardholders in a given country who have made at least one face-to-face transaction abroad versus the population of all active cardholders in the source country. The figures were adjusted to be representative of the source country’s population regardless of payment methods used by households. The propensities were then used as an input in the forecasts developed by Oxford Economics for the study.
Oxford Economics used survey data on the age and income of the international travelers from a sample of 10 countries to calculate international travel frequencies and share of travel by age bracket and income class. The results were extrapolated to a broader set of countries based on their classification as developed or emerging markets and key variables such as GDP per capita and total international arrivals per capita. The estimated travel shares were then compared with each country’s household income distribution and age distribution to develop a historical relationship from which to project international travel shares and volumes by income class and age bracket from 2005 to 2025.
About Visa Inc.
Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world’s most advanced processing networks — VisaNet — that is capable of handling more than 65,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products. For more information, visit https://usa.visa.com/, visacorporate.tumblr.com and @VisaNews.

Visa Performance Solutions is a global team of industry experts in strategy, marketing, operations, risk and economics consulting, with decades of experience in the payments industry. Using analytics from the payment network with the most purchase transactions worldwide, our team of subject matter experts can provide businesses with proven strategies and data-driven insights that support business objectives.

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